Australian company Treasury Wine Estates (TWE) has announced plans to overhaul its U.S. business, resulting in a post-tax charge of A$558.4 million, the equivalent of just under £292.5 million.

TWE, which produces Penfolds in Australia and operates U.S. brands including DAOU and Frank Family Vineyards, said that the overhaul would include fallowing vineyards, impairing brands and writing down inventory.

It continued that the decision follows a strategic review of its Americas division, where soft demand has created an elevated inventory problem alongside excess supply-chain capacity. As part of the wider overhaul, TWE is set to reduce its North Coast vintage sizes from 2026.

The company will also begin the process of impairing a series of its brands, largely focused on DAOU, Frank Family Vineyards and Beaulieu Vineyard.

Elsewhere, TWE said it would write down bulk wine inventory, of which it currently has a glut. The company noted that it plans to manage its levels of bulk wine through sales into the bulk wine market, as well as internal reclassification.

Despite the incoming charge, Treasury Wine Estates still boasted strong earnings for the financial year ending in June. It said its unaudited earnings were expected to be A$492.3 million, the equivalent to £257.8 million.

At the same time, shares have risen by 7.9%, the highest level since early December 2025, marking a phase of increased investor confidence.

The news about TWE’s U.S. business follows the announcement in June this year that it planned to reshape its portfolio, with an emphasis on luxury brands. In the statement TWE said it would be reducing its portfolio of 76 brands to fewer than 30, with a “quality-over-quantity mindset”.